Jan 22 (Reuters) - Bank of Nova Scotia is targeting growth in Latin American consumer loans and micro-financing, an area that offers wide profit margins at a time when the outlook for loan growth in Scotiabank’s home market in Canada is lackluster.

Scotiabank, which is Canada’s third-largest bank and which also has a big presence in Latin America and Asia, entered the small-loans business in Peru in 2007 with two acquisitions, and has since expanded. As of last year, its small-loan portfolio stood at C$3 billion ($3.02 billion) spread throughout Latin America.

Consumer and micro-finance loans are usually valued between $300 and $6,000 and made to individual borrowers and small lenders.

The bank now sees the area as a key lending segment and expects to ramp up growth following its 2012 purchase of Credito Familiar in Mexico, which added 246 branches in what is the largest market for micro-finance in the region, the bank says.

“We see the opportunity for certainly double-digit growth rates in net profit from this segment, and it will be a sizeable contributor to the division in retail profit overall,” Wendy Hannam, the bank’s executive vice president of Latin America, said at a bank presentation in Lima on Tuesday.

Scotiabank sees a potential market of about 100 million people spread through Peru, Mexico, Chile, and Colombia, and Hannam expects the division to eventually account for up to 15 percent of Scotiabank’s total international retail assets, up from just under 10 percent right now.

Customers from the segment will also feed the bank’s traditional higher-value retail loan business as they become more affluent, Hannam said.

The loans boast higher returns than traditional loans, but are also higher risk, with higher loan losses, which is a factor in the bank deciding to limit the size of the business to 15 percent of total international assets, said Scotiabank President Brian Porter.

“We’re building it thoughtfully,” he said.

Strong growth in the small loan segment contrasts with a slowing growth picture in Canada. Canadians are expected to curb their borrowing habits due to already record high personal debt levels, and the Canadian housing market has shown signs of slowing.

Scotiabank has spent about C$6 billion on more than 20 international acquisitions since 2007, and has also made some sizable domestic deals, including last year’s C$3.1 billion purchase of ING Groep’s Canadian online bank.

Bank executives said their focus is now more on organic growth, with little likelihood of it doing any deals valued at more than a C$1 billion, and with no plans to push outside the bank’s current geographical footprint.